Structuring Bank Deposits to Avoid Reporting Requirements

The Bank Secrecy Act (BSA) requires filing reports with the government and recordkeeping by financial institutions or individuals for domestic and foreign transactions involving currency, monetary instruments, and foreign accounts. For example, if a defendant deposits more than $10,000 into his/her bank account, he/she has to file a Currency Transaction Report (CTR).

The Bank Secrecy Act was put in place to combat money laundering and one aspect of it was to stop people from structuring bank transactions to avoid reporting requirements, also known as “smurfing”. Smurfing is a felony punishable by a fine and/or up to five years in prison.

The IRS has carried out numerous investigations that have resulted in convictions of individuals and financial institutions for the structuring of currency deposits via a network of smurfs (people who make several currency deposits of less than $10,000, usually at several different banks, to evade the filing of CTRs).

Take note, banks suspecting deposit structuring with intent to avoid the law are required to file a suspicious activity report. Moreover, banks are not allowed to tell their customers if they have reported them to the government. Banks that fail to sufficiently monitor their customers risk financial sanctions, so they have a great incentive to report you even if you’ve done nothing wrong. Because of this, it’s imperative that you contact our firm if you have any reason to believe that you are under investigation.